September 2019 Board Update

FINRA CEO Robert Cook and members of the FINRA Board of Governors provide updates from the September 2019 FINRA Board of Governors meeting.

October 3, 2019

FINRA’s Board of Governors met last week in New York, and I am writing to share with you some updates from our discussions.

During the meeting, FINRA staff provided operational updates on several ongoing initiatives, and the Board approved six rulemaking items, which are listed below. The Board also hosted two SEC officials—Pete Driscoll, Director of the SEC’s Office of Compliance Inspections and Examinations (OCIE); and Kevin Goodman, Associate Director of OCIE’s FINRA and Securities Industry Oversight (FSIO) group—who last met with the Board in May 2018. The SEC’s oversight of FINRA is critical to our effectiveness as a self-regulatory organization, and we continue to work closely regarding our respective examination activities. We appreciate that Pete and Kevin could join us to continue the discussion around our ongoing interactions with the Commission.

For more information about the discussions that took place during the September FINRA Board of Governors meeting, please watch the September 2019 Board Report video. Our next meeting is December 4 – 5 in New York. More information regarding the Board's operations, including the membership and responsibilities of its committees, is available at www.finra.org/governance.

Sincerely,

Robert W. Cook
President and CEO

Rulemaking Items Approved at the September 2019 Board Meeting

Proposed Amendments Permitting Dissemination of Aggregated TRACE Data for U.S. Treasury Securities
The Board approved proposed amendments to permit FINRA to publish aggregated volume information on U.S. Treasury Securities, in accord with the recommendation of the U.S. Department of the Treasury. FINRA member firms began reporting transactions in U.S. Treasury Securities to TRACE in July 2017, but FINRA does not currently publish any aggregated volume or transaction data on Treasury Securities. The proposed amendments will next be filed with the SEC.

Proposed Amendments to the Code of Procedure to Compensate Hearing Panelists
The Board approved proposed amendments to the Code of Procedure relating to the compensation of members of a Hearing Panel. Currently, industry panelists in extended hearings are paid—because of the length of these hearings—whereas panelists in regular hearings are not. The proposal amends the procedural rules for hearings to provide payment of all panelists regardless of the length of the hearing. The proposed amendments will next be filed with the SEC.

Proposed Amendments to Capital Acquisition Broker Rules
The Board approved publication of a Regulatory Notice seeking comment on proposed amendments to the Capital Acquisition Broker Rules to revise various aspects of the rules applicable to CABs based on experience with the rules.

Proposed Rule to Require Firm Approval of a Registered Person Being a Beneficiary, Executor, or Trustee, or Having a Power of Attorney or Similar Position of Trust for, or on Behalf of a Customer
The Board authorized FINRA to publish a Regulatory Notice soliciting comment on a proposed new rule to require firm approval of a registered person being a beneficiary, executor, or trustee, or having a power of attorney or similar position of trust for or on behalf of a customer.

Proposed Changes to the Codes of Arbitration Procedure Relating to Requests to Expunge Customer Dispute Information
The Board approved proposed amendments to the Codes of Arbitration Procedure to create, among other things, a roster of arbitrators with enhanced training and experience from which a panel would be selected in certain instances to decide an associated person’s request to expunge customer dispute information. The proposed amendments will next be filed with the SEC.

Proposed Amendments Enhancing Requirements for Inter-Dealer Quotation Systems That Display Quotes in Unlisted Equity Securities
The Board approved proposed amendments to enhance requirements for inter-dealer quotation systems that display quotes in unlisted equity securities. The proposed amendments will next be filed with the SEC.

Visit FINRA’s website for more information about FINRA’s rulemaking process.